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From Health Law Daily, October 2, 2014

CMS corrects ‘typographical and technical errors’ in FY 2015 IPPS rule

By Bryant Storm, JD

CMS has issued corrections to its rule setting payment rates and making policy changes to the Inpatient Prospective Payment System (IPPS) for Fiscal Year (FY) 2015. As a result of multiple technical errors in the Final rule, CMS issued the correction document to rectify the errors. According to the CMS Final rule correction, the corrections have an effective date of October 1, 2014.

Final rule. The Final rule, which was published in the Federal Register on August 22, 2014, set Medicare payment and policy changes for approximately 3,400 general acute care and 435 long-term care hospitals (LTCHs) for FY 2015. Among the most significant changes were a payment rate update of 1.4 percent for acute care hospitals and an update of 1.1 percent for LTCHs. The Final rule also increased the scope of the Value-Based Purchasing (VBP) Program created by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), which adjusts hospital payments under the Inpatient Prospective Payment System (IPPS) relative to the quality of care furnished by the hospital. Additionally, in an attempt to increase patient quality and reduce unnecessary hospital readmissions, the Final rule increased payment reductions under the Hospital Readmissions Reduction program from 2 to 3 percent (see Quality and cost reduction are focus of FY 2015 IPPS rule, August 22, 2014).

Errors. The typographical and technical errors affected the preamble, regulation text, addendum, and appendices of the Final rule as well as tables posted on the CMS website. The errors include the following:

  • In the preamble, there was a technical error in the amount the payments would decrease in the discussion of the costs and benefits of the payment adjustment of the Hospital-Acquired Condition (HAC) Reduction Program.

  • Also in the preamble, there were typographical and technical errors in the discussion of the Long-Term Care Hospital Quality Reporting (LTCHQR) Program and the discussion of organ transplant centers.

  • In the regulation text, there were “technical errors in specifying the requirements regarding a provider's right to contractor or Board hearings resulting from untimely contractor determinations.” The affected regulations are 42 C.F.R. sec. 405.1811(c) and sec. 405.1835(c).

  • In the addendum, there were two errors in calculating the FY 2015 IPPS operating and capital rates and impacts that resulted from (1) failing to treat Medicare Severity Diagnosis Related Groups (MS-DRGs) that qualified for a special payment under the post-acute care transfer policy and (2) improperly identifying claims for indirect medical education payments for Medicare Advantage beneficiaries in the rate-setting process.

The two IPPS rate calculation errors led to several additional errors that required correction. Specifically, the miscalculations resulted in errors to “the operating and capital budget neutrality factors, outlier threshold, operating standardized amounts, capital Federal rates, and capital IPPS payment estimates.” The data in the tables in the Final rule itself and on the CMS website were affected by the rate miscalculations and have been corrected. The rate calculation errors also required a recalculation of the VBP program payment adjustment factors for FY 2015.

Rulemaking. The CMS correction document specifies that it is not publishing a notice of proposed rulemaking in the Federal Register to allow the corrections to be subject to public comment under the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). In light of the fact that the corrections constitute only typographical and technical corrections to errors in the Final rule, CMS believes it has good cause to the waive notice and comment requirements that govern most agency rulemaking.

MainStory: TopStory ReimbursementNews CMSNews QualityNews PaymentNews IPPSNews

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